Discussions are underway at the World Trade Organization (WTO) 2024 Public Forum this week aimed at reducing the costs of remittances for developing countries. While these talks are still in the early stages and involve the WTO collaborating with various international organizations, financial institutions, and central banks, there is not complete agreement among all WTO members.
WTO Deputy Director-General Xiangchen Zhang noted that several developing nations have submitted proposals to the WTO’s Council for Trade in Services addressing this issue. He emphasized the significance of remittances to GDP growth in these countries.
According to the World Bank, the average global cost of sending remittances stands at 6.35 percent in the first quarter of 2024, considerably higher than the United Nations Sustainable Development Goal (SDG) target of under three percent. Mr. Zhang remarked that the WTO cannot tackle this challenge alone, stressing the necessity for collaborative efforts with financial institutions and other international bodies.
“We require more discussions, collaboration, technical assistance, transparency, and the integration of digital technology to assist developing countries in lowering remittance costs,” he stated. Experts have been invited to discuss the specific challenges faced by these nations.
However, he noted that the current steps taken are not enough, and the next phase will involve submitting recommendations from the forum to the Committee of Trade in Financial Services to further the debate. Zhang called for increased awareness among WTO members and for cooperation with other organizations such as the International Labour Organization (ILO) and the International Organization for Migration, as well as with financial institutions like the World Bank and central banks in developing countries.
He concluded by highlighting the need for greater transparency, competition, digital technology, technical assistance, and collaboration as critical factors for progress.
In Fiji, personal remittances represent the second largest source of foreign exchange earnings, with a notable 14.2 percent increase recorded in the first quarter of this year, totaling $310.5 million compared to $271.8 million in the same period last year.